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Powell likes duop

Says allowing ownership of two TVs in small markets may increase diversity5/13/2001 08:00:00 PM Eastern

By By Bill McConnell

Sinclair asks for more time

Sinclair asks for more time

Sinclair Broadcasting wants the FCC to put on ice an Aug. 6 deadline for severing ties to four stations the company operates but doesn't own.

Each station is in a market where Sinclair also owns a station outright: Columbus and Dayton, both Ohio; Charleston, S.C. and Charleston, W.V. The four so-called local marketing agreements violate FCC ownership rules forbidding one company to control two TV outlets in a market containing fewer than eight separately owned stations.

Last week Sinclair asked the FCC to stay the divestiture dates pending the outcome of its challenge to the eight-voice test in the federal appeals court in Washington. Oral arguments in the case won't be held until Jan. 14 and a ruling might not come until months later.

The FCC permitted duopolies in large markets in 1999, but forbade them in areas with a relatively small number of stations. Local marketing agreements, previously exempt from an operator's ownership tally, were added to the count. Thus, several of Sinclair's LMAs were suddenly out of bounds.

If the FCC sticks to the divestiture deadline, Sinclair will ask the court to force a delay, arguing that it would suffer "irreparable injury" if forced to disassociate from stations in which it invested millions of dollars to add local news and improve facilities.

Sinclair also operates LMAs in Baltimore and Syracuse that might be forced to unwind as early as 2004 if the duopoly voice test is upheld. Those two LMAs were established before a November 1999 "grandfather" date and were given a five-year reprieve that could be extended on a case-by case basis.

—Bill McConnell

Only a few years ago, the government forbade one company to own two TV stations in the same market. Two years after the FCC relented in major markets, the agency's new chairman said allowing TV duopolies and other multiple-media ownership might be the right thing for small markets, too.

In an interview with B&C last week, Chairman Michael Powell countered the longstanding conventional wisdom of broadcast regulation by suggesting hometown input in local media may be enhanced if owners are allowed to control multiple media properties in small towns and rural areas.

"Duopoly is probably more powerful in small markets where we have stations that can't survive," he said.

Bristling at the suggestion his deregulatory philosophy threatens localism and media diversity, Powell insisted those goals can be protected—perhaps better protected—if the FCC dropped rules limiting duopoly and radio/TV crossownership in small markets.

"Many say if you're against the rules you're against their objectives, but that's not true," he said. "I assure you we believe in the goals of diversity and the healthy marketplace of ideas. We just take issue with the best way to achieve them."

FCC rules forbid TV duopolies in a market when fewer than eight separately owned stations would remain. Radio/TV crossownership is limited to one station of each service in small markets. TV owners in small towns are asking the FCC to eliminate the duopoly restriction and one has challenged the provision in court (see story, page 11).

But what's worse for local media control, he asked, allowing a local TV owner to take over a struggling station or forcing one to sell out to Clear Channel? "It's small and rural markets where there is less ad revenue per share, more complex economics," he said. "We want to dictate how they survive, but we don't want to guarantee they will survive."

Powell has been characterized by some Democrats and in press accounts as preparing to cavalierly toss out longstanding ownership restrictions, including the 35% cap on TV household reach, simply on his faith in conservative economic theories. But the former antitrust lawyer suggested his critics are the ones in ivory towers.

For decades, he said, other limits on broadcasters were hailed as necessities for ensuring fair treatment to people who don't control stations, including ones barring the networks from owning their own shows and requiring stations to offer a right of reply to candidates and others criticized on air.

"If you look at the history, you'll hear some extraordinary rhetoric about this being the end of the world in terms of program and content diversity if they were removed. Now they're gone. Did that happen?"

Nonetheless, Powell said, deregulation is no slam dunk. "I'm one of those moderate Republicans who bristle at the suggestion that all we do is get up in the morning and decide to do away with the next 50 regulations."

Also, Powell won't have a free hand. Congress set the 35% cap and many members still believe in it. (The cap is now being challenged in court.) Lawmakers are also split on whether to relax the prohibition against common ownership of newspapers and broadast stations in a market.

Powell promises each rule will get the toughest review yet. "Anyone who believes a rule is critical to the marketplace and to democracy, you're invited to make the case," he said.

Critics of deregulation expect to receive a fair hearing from Powell, but little more. "I'm not naïve," said Andrew Schwartzman, president of the Media Access Project. "I bet we'll lose on everything."

Sinclair asks for more time

Sinclair asks for more time

Sinclair Broadcasting wants the FCC to put on ice an Aug. 6 deadline for severing ties to four stations the company operates but doesn't own.

Each station is in a market where Sinclair also owns a station outright: Columbus and Dayton, both Ohio; Charleston, S.C. and Charleston, W.V. The four so-called local marketing agreements violate FCC ownership rules forbidding one company to control two TV outlets in a market containing fewer than eight separately owned stations.

Last week Sinclair asked the FCC to stay the divestiture dates pending the outcome of its challenge to the eight-voice test in the federal appeals court in Washington. Oral arguments in the case won't be held until Jan. 14 and a ruling might not come until months later.

The FCC permitted duopolies in large markets in 1999, but forbade them in areas with a relatively small number of stations. Local marketing agreements, previously exempt from an operator's ownership tally, were added to the count. Thus, several of Sinclair's LMAs were suddenly out of bounds.

If the FCC sticks to the divestiture deadline, Sinclair will ask the court to force a delay, arguing that it would suffer "irreparable injury" if forced to disassociate from stations in which it invested millions of dollars to add local news and improve facilities.

Sinclair also operates LMAs in Baltimore and Syracuse that might be forced to unwind as early as 2004 if the duopoly voice test is upheld. Those two LMAs were established before a November 1999 "grandfather" date and were given a five-year reprieve that could be extended on a case-by case basis.